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Item 1. Business

2024-02-29 compared with 2023-02-27 · 148 added, 279 removed, 239 unchanged (64% of the section changed)

Par Pacific Holdings, Inc., headquartered in Houston, Texas, owns and operates market-leading energy and infrastructure businesses.

Our strategy is to acquire and develop energy and infrastructure businesses in logistically complex, niche markets.

Par Pacific Holdings, Inc., headquartered in Houston, Texas, is a growth-oriented energy company providing both renewable and conventional fuels to the western United States.

Our business is organized into three primary segments:

1) Refining - We own and operate three refineries with total operating crude oil throughput capacity of 155 Mbpd.

Our refinery in Kapolei, Hawaii, produces gasoline, jet fuel, ultra-low sulfur diesel (“ULSD”), marine fuel, low sulfur fuel oil (“LSFO”), and other associated refined products primarily for consumption in Hawaii.

Our refinery in Newcastle, Wyoming, produces gasoline, jet fuel, ULSD, and other associated refined products that are primarily marketed in Wyoming and South Dakota.

Our refinery in Tacoma, Washington, produces gasoline, jet fuel, ULSD, asphalt, and other associated refined products that are primarily marketed in the Pacific Northwest.

1) Refining - We own and operate four refineries with total operating crude oil throughput capacity of 219 Mbpd.

Our refineries in Kapolei, Hawaii, Newcastle, Wyoming, Tacoma, Washington, and Billings, Montana, convert crude oil into gasoline, distillate, asphalt and other products to serve the state of Hawaii and areas ranging from Washington state to the Dakotas and Wyoming.

2) Retail - We operate fuel retail outlets in Hawaii, Washington, and Idaho.

Our fuel retail outlets in Hawaii sell gasoline and diesel throughout the islands of Oahu, Maui, Hawaii, and Kauai.

We operate convenience stores at 34 of our Hawaii retail fuel outlets under our proprietary “nomnom” brand that sell merchandise such as soft drinks, prepared foods, and other sundries.

Our Hawaii retail network includes Hele and “76” branded fuel retail sites, “nomnom” branded company-operated convenience stores, 7-Eleven operated convenience stores, other sites operated by third parties, and unattended cardlock stations.

Our nomnom-branded convenience stores in Washington and Idaho sell gasoline, diesel, and retail merchandise.

We operate convenience stores and fuel retail sites under our “Hele” and “nomnom” brands, “76” branded fuel retail sites and other sites operated by third parties that sell gasoline, diesel, and retail merchandise such as soft drinks, prepared foods, and other sundries.

We also operate unattended cardlock stations.

3) Logistics - We operate an extensive multi-modal logistics network spanning the Pacific, the Northwest, and the Rocky Mountain regions.

We own and operate terminals, pipelines, a single point mooring (“SPM”), and trucking operations to distribute refined products throughout the islands of Oahu, Maui, Hawaii, Molokai, and Kauai.

We lease marine vessels for the movement of petroleum, refined products, and ethanol between the U.S.

West Coast and Hawaii.

We own and operate a crude oil pipeline gathering system, a refined products pipeline, storage facilities, and loading racks in Wyoming and a jet fuel storage facility and pipeline that serve Ellsworth Air Force Base in South Dakota.

We own and operate logistics assets in Washington, including a marine terminal, a unit train-capable rail loading terminal, storage facilities, a truck rack, and a proprietary pipeline that serves Joint Base Lewis McChord.

In 2020, we completed a project at our Tacoma, Washington, location to allow for the storage and shipment of ethanol through our unit train and marine terminals.

We also own a 46.0% equity investment in Laramie Energy, LLC (“Laramie Energy”), an entity focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado.

This network includes an SPM in Hawaii, a unit train-capable rail loading terminal in Washington, and other terminals, pipelines, trucking operations, marine vessels, storage facilities, loading and truck racks, and rail facilities for the movement of petroleum, refined products, and ethanol in and among the Hawaiian islands, between the U.S.

West Coast, and the Rocky Mountain region.

As of December 31, 2023, we owned a 46% equity investment in Laramie Energy, LLC (“Laramie Energy”), an entity focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado.

As of December 31, 2023, through the Billings Acquisition (as defined in Note 5—Acquisitions under Item 8 of this Annual Report on Form 10-K), we own a 65% and a 40% equity investment in Yellowstone Energy Limited Partnership (“YELP”) and Yellowstone Pipeline Company (“YPLC”), respectively.

Our Corporate and Other reportable segment primarily includes general and administrative costs.

Please read Note 23—Segment Information to our consolidated financial statements under Item 8 of this Form 10-K for detailed information on our operating results by segment.

Impacts of the COVID-19 Pandemic

The spread and severity of the coronavirus (“COVID-19”) pandemic, in conjunction with government and other preventative measures taken to mitigate the spread of the virus, have caused severe disruptions in the worldwide economy, including the global demand for crude oil and refined products, the movement of people and goods in the United States, and the global supply chain for industrial and commercial production, all of which have in turn disrupted our businesses and operations and impacted our financial performance in 2022, 2021 and 2020.

As of December 2022, the epidemiological conditions in regions in which we operate had improved significantly and most restrictions have been relaxed.

This, combined with widespread vaccine availability, has lessened the perceived severity of the pandemic, leading to higher risk tolerance for individuals and increased travel and public contact in the regions in which we operate.

However, a resurgence of the virus or another pandemic event could cause a return to severe restrictions, leading to a deterioration of macroeconomic conditions and our industry.

We continue to actively monitor the impact of the global situation on our people, operations, financial condition, liquidity, suppliers, customers, and industry, and are actively responding to the impacts that these matters have on our business.

Macroeconomic Factors Affecting Our Business

and Global Inflationary Factors.

Energy prices are, among other factors, indicators of inflation, and the U.S.

Federal Reserve (the “Fed”) has taken significant steps to curb inflation, and continued to increase interest rates in 2023, from near zero percent at the beginning of 2022 to a range of 5.25% to 5.5% in December 2023.

These actions by the Fed acted to lower U.S.

inflation rates, which have decreased 3.4% year over year as of the December inflation report released in January 2024.

retail price for regular-grade gasoline averaged $3.52 per gallon in 2023, following gasoline price highs of approximately $5.01 per gallon in the summer of 2022.

This decline was due, in part, to lower crude oil prices in 2023 compared with 2022 and higher gasoline inventories in the second half of 2023.

The COVID-19 Pandemic.

Subsequent to the pandemic, and various preventive and mitigating measures taken in response, refined product demand has largely returned to 2019 levels.

Despite global additions to refining capacity, the availability of refining capacity has not kept pace with demand, and global refinery utilization is above normal levels.

Consequently, refining product margins have been consistently above pre-pandemic margins since the spring of 2022.

Geopolitical Conflicts.

Given the nature of our operations, including sourcing crude oil and feedstocks, geopolitical conflicts may affect our business and results of operations.

The Russia-Ukraine war, the Israel-Palestine conflict, Houthi attacks in the Red Sea, and Iranian activities in the Strait of Hormuz have all disrupted global trade patterns, increased crude oil price volatility, and increased freight costs and delivery times.

We continue to actively monitor the impact of these and other global situations on our people, operations, financial condition, liquidity, suppliers, customers, and industry, and are actively responding to the impacts that these matters have on our business.

Please read “Item 1A.

— Risk Factors” and “Item 7.

— Management’s Discussion and Analysis of Financial Condition and

Results of Operations — Overview” for further discussion of the risks, uncertainties, and actions we have taken in response to the global COVID-19 pandemic and resulting economic impact.

— Management’s Discussion and Analysis of Financial

Condition and Results of Operations — Overview” for further discussion of the risks, uncertainties, and actions we have taken in response to the conditions noted above and the resulting economic impacts.

Corporate Information

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OPERATING SEGMENTS

Our refining segment buys and refines crude oil and other feedstocks into petroleum products (such as gasoline and distillates) at our Hawaii, Wyoming, and Washington refineries.

We own and operate refineries in Hawaii, Wyoming, Washington, and Montana, with total operating crude oil throughput capacity of 219 Mbpd.

During the year ended December 31, 2023, our refineries processed 170.3 Mbpd of crude oil and sold 183.1 Mbpd of refined products.

Our refineries consist of various units, including crude oil distillation, vacuum distillation, hydrocracking, catalytic reforming, naphtha hydrotreating, diesel hydrotreating, fluidized catalytic cracking, alkylation, and isomerizing units.

Our refineries process a variety of condensate and light and heavy crude oils purchased from domestic and foreign suppliers to produce LPG, naphtha, gasoline, jet fuel, ULSD, marine fuel, LSFO, HSFO, asphalt, and other associated refined products.

Our refineries are connected with each other and with the communities we serve via pipelines, terminals, tankers, and other transportation mechanisms.

These various forms of transportation allow the movement of crude oil, various feedstocks, and a variety of refined products from our suppliers to our refineries, among our refineries, and from our refineries to our customers.

Please read our Logistics segment discussion below for additional information.

Descriptions of our refineries and their capacities are below.

Hawaii Refinery.

Our Hawaii refinery is located in Kapolei, Hawaii, on the island of Oahu, and is rated at 94 Mbpd of Crude unit operating throughput capacity.

The Hawaii refinery’s major processing units, listed in the table below, produce liquified petroleum gas (“LPG”), naphtha, gasoline, jet fuel, ULSD, marine fuel, LSFO, high sulfur fuel oil (“HSFO”), asphalt, and other associated refined products.

The Hawaii refinery’s major processing units produce LPG, naphtha, gasoline, jet fuel, ULSD, marine fuel, LSFO, HSFO, asphalt, and other associated refined products.

We believe the configuration of our Hawaii refinery uniquely fits the demands of the Hawaii market.

Set forth below are summaries of the operating capacity of our Hawaii refinery as of December 31, 2022:

Hawaii Refining Unit Capacity (Mbpd)

Crude Oil Distillation Units 94

Vacuum Distillation Units 40

Hydrocracker 19

Catalytic Reformer 13

Visbreaker / Crude Oil Distillation 11

Naphtha Hydrotreater 13

Diesel Hydrotreater 10

Hawaii Refining Unit Capacity

Hydrogen Plant (MMcfd) 18

Co-generation Turbine Unit (MW) 20

We source our crude oil for the Hawaii refinery from North America, Asia, Latin America, Africa, the Middle East, and other sources.

Effective March 3, 2022, we suspended purchases of Russian crude oil as a response to the Russia-Ukraine conflict.

Crude oil is received into the Hawaii refinery’s tank farm, which includes 3.4 MMbbls of total owned crude oil storage and/or third-party crude oil storage.

We process the crude oil through various refining units into products and store them in the Hawaii refinery’s owned 3.3 MMbbls of refined product storage and additional third-party product storage.

This storage capacity allows us to manage the various product requirements of our customers.

For example, in 2022, our Hawaii refinery

leased 0.3-0.4 MMBbls of capacity to the Defense Logistics Agency (“DLA”) until April 2024.

Revenue from this agreement is reported in our Hawaii Logistics segment.

We finance our Hawaii refinery’s hydrocarbon inventories through a supply and offtake agreement (the “Supply and Offtake Agreement”) with J.

Aron & Company LLC (“J.

Under the Supply and Offtake Agreement, J.

Aron holds title to all crude oil and refined product stored in tankage at the Hawaii refinery.

We purchase crude oil from J.

Aron on a daily basis at market prices and sell refined products to J.

Aron as they are produced.

We repurchase these refined products from J.

Aron prior to selling them to third parties.

The Hawaii refinery operated at an average combined crude oil throughput of 81.8 Mbpd, or 87% of crude oil utilization, to meet local demand for the year ended December 31, 2022.

Our Par West refinery has been shut down and is not expected to restart.

For further operational statistics regarding our Hawaii refining operations, please read “Item 7.

— Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.”

Our Hawaii refining business contracts with wholesale and bulk customers as well as our Hawaii retail network.

Many of these contracts also involve use of our Hawaii logistics assets to ultimately serve each customer.

Wholesale customers include jobbers and other non-end users, as well as 43 locations where we deliver fuel to a location that subsequently sells the product at retail to the end user.

Bulk customers include utilities, airlines, military, marine vessels, industrial end-users, and exporters.

The profitability of our Hawaii refining business is heavily influenced by crack spreads in the Singapore market.

This market reflects the closest liquid market alternative to source refined products for Hawaii.

We believe the 3-1-2 Singapore Crack Spread is the best market indicator for our Hawaii operations.

We believe the 3-1-2 Singapore Crack Spread is the most representative market indicator for our Hawaii operations.

The 3-1-2 Singapore Crack Spread is computed by taking one barrel of gasoline and two barrels of distillates (diesel and jet fuel) from three barrels of Brent crude oil.

The 3-1-2 Singapore Crack Spread averaged $25.43 per barrel during the year ended December 31, 2022, with a low of $16.21 per barrel average in the first quarter and a high of $36.80 per barrel average in the second quarter.

Below is a summary of average crack spreads for the years ended December 31, 2022, 2021, and 2020:

Year Ended December 31,

2022 2021 2020

3-1-2 Singapore Crack Spread

$ 25.43 $ 6.22 $ 3.15

Montana Refinery.

Our Montana refinery is located along the Yellowstone River just outside Billings, Montana, and is rated at 63 Mbpd throughput capacity.

The Montana refinery is a high-conversion, complex facility that processes low-cost Western Canadian and regional Rocky Mountain crude oil to produce gasoline, distillate, asphalt, and other products to serve the Rocky Mountain region.

Our Montana refinery assets include a 65% interest in an adjacent co-generation facility.

We believe the RVO Adjusted USGC 3-2-1 is the most representative market indicator for our operations in Billings, Montana.

The RVO Adjusted USGC 3-2-1 Index is computed by taking three barrels of WTI crude oil and converting them into two barrels of USGC gasoline and one barrel of USGC ULSD, less 100% of the RVO cost.

Washington Refinery.

Our Washington refinery is located in Tacoma, Washington, on approximately 139 fee-owned acres and is rated at 42 Mbpd throughput capacity.

The Washington refinery’s major processing units include crude oil distillation, vacuum, jet treating, diesel hydrotreating, isomerization, and reforming units, which produce ULSD, jet fuel, gasoline, asphalt, and other associated refined products that are primarily marketed in the Pacific Northwest.

We source our crude oil for the Washington refinery primarily from Canadian and Bakken producers as well as other North American sources.

Most of the crude oil is delivered to the refinery via our owned unit train facility and the rest is delivered by barge.

Crude oil is received into the refinery tank farm, which includes 1.2 MMbbls of total crude oil storage.

We process the crude oil through various refining units into products and store them in the refinery’s 1.5 MMbbls of refined product tankage.

This storage capacity allows us to manage the various product requirements of our customers in the state of Washington and other targeted market destinations.

In 2020, 0.2 MMbbls of crude oil storage was repositioned as renewable fuels storage as part of the completion of our project to allow for storage and throughput of renewable fuels at the refinery.

We finance our Washington refinery hydrocarbon inventories through an intermediation arrangement (the “Washington Refinery Intermediation Agreement”) with Merrill Lynch Commodities, Inc.

Under this arrangement, U.S.

Oil purchases crude oil supplied from third-party suppliers and MLC provides credit support for certain crude oil purchases.

MLC’s credit support can consist of either providing a payment guaranty, causing the issuance of a letter of credit from a third party issuing bank, or purchasing crude oil directly from third parties on our behalf.

Oil holds title to all crude oil and refined products inventories at all times and pledges such inventories, together with all receivables arising from the sales of these inventories, exclusively to MLC.

Set forth below is a summary of the capacity of our Washington refinery as of December 31, 2022:

Washington Refining Unit Capacity (Mbpd)

Crude Oil Distillation Unit 42

Vacuum Unit 19

Naptha Hydrotreaters 13

Catalytic Reformers 7

Diesel Hydrotreater 8

Isomerization 5

The Washington refinery operated at an average throughput of 35.5 Mbpd, or 85% utilization, for the year ended December 31, 2022.

In 2021 and 2022, we executed turnaround activities in Washington, which resulted in lower throughput and utilization outside of market conditions.

For further operational statistics regarding our Washington refining operations, please read “Item 7.

— Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.”

Our Washington refining business transports crude oil and refined products through our logistics network and sells refined products to wholesale, bulk, and retail customers primarily in the Pacific Northwest.

We believe the Pacific Northwest 5-2-2-1 Index is the best market indicator for our operations in Tacoma, Washington.

The Pacific Northwest 5-2-2-1 Index is computed by taking two parts gasoline (sub-octane), two parts middle distillates (ULSD and jet fuel), and one part fuel oil as created from five barrels of Alaskan North Slope (“ANS”) crude oil.

The Pacific Northwest 5-2-2-1 Index averaged $32.40 per barrel during the year ended December 31, 2022, with a low of $21.88 per barrel average in the first quarter and a high of $46.16 per barrel average in the second quarter.

Below is a summary of average crack spreads and crude oil prices per barrel for the years ended December 31, 2022, 2021, and 2020:

Year Ended December 31,

2022 2021 2020

Pacific Northwest 5-2-2-1 Index

$ 32.40 $ 15.95 $ 11.44

Bakken Clearbrook 98.09 68.20 37.19

WCS Hardisty 75.43 54.61 27.45

ANS 102.56 71.49 41.77

Our Washington refinery is located in Tacoma, Washington, and is rated a t 42 Mbpd throughput capacity.

The Washington refinery’s major processing units produce ULSD, jet fuel, gasoline, asphalt, and other associated refined products that are primarily marketed in the Pacific Northwest.

We believe the RVO Adjusted Pacific Northwest 3-1-1-1 Index is the most representative market indicator for our operations in Tacoma, Washington with improved historical correlations to our reported adjusted gross margin compared to prior reported indices.

The RVO Adjusted Pacific Northwest 3-1-1-1 Index is computed by taking one part gasoline (PNW sub-octane), one part distillate (PNW ULSD), and one part VGO (USGC VGO) as created from three barrels of WTI Crude, less 100% of the RVO cost for gasoline and distillate.

January 2024, our Washington refinery was awarded the U.S.

Environmental Protection Agency’s (“EPA”) ENERGY STAR certification, indicating the refinery performs in the top 25% of similar facilities nationwide for energy efficiency and meets strict energy efficiency performance levels set by the EPA.

Wyoming Refinery.

Our Wyoming refinery is located in Newcastle, Wyoming, on approximately 121 fee-owned acres and with a capacity of 19 Mbpd throughput.

The Wyoming refinery’s major processing units include crude oil distillation, catalytic cracker, naphtha hydrotreating, and reforming units, which produce gasoline, ULSD, jet fuel, and other associated refined products.

In 2022, our Wyoming operations set a new crude production record of processing 19.2 Mbpd.

We source our crude oil for the Wyoming refinery from local producers in the Rocky Mountain region of the United States and North Dakota as well as other North American sources.

Most of the crude oil is delivered to the refinery via our owned pipeline network and the rest is delivered by truck.

Crude oil is received into the refinery tank farm and crude oil terminals, which include 267 Mbbls of total crude oil storage.

We process the crude oil through various refining units into products and store them in the Wyoming refinery’s 490 Mbbls of refined product tankage.

The Wyoming refinery’s storage capacity allows us to manage the various product requirements of our customers in the states of Wyoming and South Dakota and other targeted market destinations.

Set forth below is a summary of the capacity of our Wyoming refinery as of December 31, 2022:

Wyoming Refining Unit Capacity (Mbpd)

Crude Oil Distillation Unit 19

Residual Fluid Catalytic Cracker 7

Catalytic Reformer 4

Naphtha Hydrotreater 4

Diesel Hydrotreater 6

Isomerization 5

The Wyoming refinery operated at an average throughput of 16.5 Mbpd, or 92% utilization, for the year ended December 31, 2022.

In 2020, we executed a turnaround in Wyoming, which resulted in lower throughput and utilization outside of market conditions.

For further operational statistics regarding our Wyoming refining operations, please read “Item 7.

— Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.”

Our Wyoming refining business transports refined products through our logistics network to wholesale, bulk, and retail customers primarily in Wyoming and South Dakota.

Products are also distributed by rail from our refinery to markets beyond our logistics network.

We believe the Wyoming 3-2-1 crack spread, a 50%/50% blend of Rapid City 3-2-1 and Denver 3-2-1 (WTI based) crack spreads, best reflects a market indicator for our Wyoming refining and fuel distribution operations.

The Wyoming 3-2-1 Index, or three barrels of WTI converted into two barrels of gasoline and one barrel of distillates (jet fuel and diesel), averaged $41.32 per barrel during 2022 with a low of $26.53 per barrel average in the first quarter and a high of $54.55 per barrel average in the second quarter.

Below is a summary of average crack spreads for the years ended December 31, 2022, 2021, and 2020:

Year Ended December 31,

2022 2021 2020

Wyoming 3-2-1 Index

$ 41.32 $ 29.00 $ 17.80

Our Wyoming refinery is located in Newcastle, Wyoming, and is rated at 20 Mbpd thr oughput capacity.

The Wyoming refinery’s major processing units produce gasoline, ULSD, jet fuel, and other associated refined products.

We believe the RVO Adjusted USGC 3-2-1 the most representative market indicator for our Wyoming refining and fuel distribution operations with improved historical correlations to our reported adjusted gross margin compared to prior reported indices.

Please read the discussion of the RVO Adjusted USGC 3-2-1 Index in the Montana refinery section above for further information.

In January 2024, our Wyoming refinery was also awarded the EPA’s ENERGY STAR certification.

Crude Oil Supply

We source our crude oil feedstock from North America, Asia, Latin America, Africa, the Middle East, and other sources.

Effective March 3, 2022, we suspended purchases of Russian crude oil as a response to the Russia-Ukraine conflict.

All facets of the energy industry are highly competitive.

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Many of these competitors have greater financial and technical resources and staff which may allow them to better withstand and react to changing and adverse market conditions.

In addition, the energy industry is subject to global economic and political factors and changing governmental regulations.

Our operating results are affected by changes in pricing for crude oil, feedstocks, and natural gas, as well as changes in the markets that we serve.

All our refineries’ product slates are tailored to meet local demand.

In the continental U.S., our refined products typically serve areas ranging from Washington state to the Dakotas and Wyoming.

Our refining business sources and obtains all of our crude oil from third-party sources and competes globally for crude oil and feedstocks.

Our Hawaii refinery, through our facility with J.

Aron, has access to a large variety of markets for crude oil imports and product exports and sources its crude oil from the Americas, Africa, Asia, and to a lesser extent other sources worldwide throughout 2022.

Effective March 3, 2022, we suspended purchases of Russian crude oil as a response to the Russia-Ukraine conflict.

Please read Note 11—Inventory Financing Agreements to our consolidated financial statements under Item 8 of this Form 10-K for further information.

Our Washington refinery utilizes an intermediation arrangement with MLC and sources its crude oil and feedstocks primarily from North Dakota and Canada.

Please read Note 11—Inventory Financing Agreements to our consolidated financial statements under Item 8 of this Form 10-K for further information.

Our Wyoming refinery sources its crude oil and feedstocks primarily from the Petroleum Administration for Defense District IV Rocky Mountain (“PADD IV”) region of the United States.

Our Hawaii refinery’s product slate is tailored to meet local on-island demand.

Outside the Hawaii market, our refined product sales from our Hawaii refinery typically target the U.S.

West Coast market.

Our Washington refinery primarily sells refined products in the Pacific Northwest region.

Our Wyoming refinery primarily sells refined products locally in the PADD IV region.

The retail segment includes 90 locations in Hawaii and 31 locations in Washington and Idaho where we set the price to the retail consumer.

Of these, 34 of the Hawaii locations and all 31 Washington and Idaho locations are operated by our

personnel and include various sizes of convenience stores, snack shops, and kiosks.

The remaining 56 Hawaii locations are cardlocks or sites operated by third parties where we retain ownership of the fuel and set retail pricing.

We hold exclusive licenses within the state of Hawaii to utilize the “76” brand for retail locations, with 40 of our retail sites branded “76”.

The retail segment includes locations in Hawaii, Washington, and Idaho where we set the price to the retail consumer.

Certain of our Hawaii locations and all of the Washington and Idaho locations are operated by our personnel and include various sizes of convenience stores, snack shops, and kiosks.

The remaining locations in Hawaii are cardlocks or sites operated by third parties where we retain ownership of the fuel and set retail pricing.

As of December 31, 2023, our company-operated convenience stores with fuel in Hawaii are branded “Hele,” our proprietary brand.

Additionally, some of our partner sites operate under our proprietary Hele fuel brand.

We also hold exclusive licenses within the state of Hawaii to utilize the “76” brand for retail locations.

The “76” license agreement expires October 31, 2031, unless extended by mutual agreement.

An additional 42 of our sites operate under our proprietary Hele fuel brand.

Since its launch in 2016, the Hele brand has won several awards for being the preferred fuel choice for Hawaii customers.

Our eight cardlock locations on Kauai are branded Kauai Automated Fuels (“KAF”).

All 34 company-operated convenience stores in Hawaii are branded “nomnom,” our proprietary brand.

In 2023, we plan to convert all of our convenience stores in Hawaii to our Hele brand.

Our cardlock locations on Kauai are branded Kauai Automated Fuels (“KAF”).

We operate convenience stores at all of our retail fuel outlets in Washington and Idaho.

We use our proprietary “nomnom” brand at both the fueling facilities and stores.

Our current store count includes the acquisition and rebranding in 2022 of three new convenience store locations in Washington acquired in December 2, 2022.

Additionally, we broke ground on a new to industry site in a growth area of Spokane, Washington, which is scheduled to open during the second half of 2023.

Our current store count includes the acquisition and rebranding of three convenience store locations in Washington acquired on December 2, 2022.

Additionally, we opened a new to industry site in a growth area of Spokane, Washington, on September 25, 2023.

Competitive factors that affect our retail performance include product price, station appearance, location, customer service, and brand awareness.

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This SPM allows for the safe, reliable, and efficient receipt of crude oil shipments to the Hawaii refinery, as well as both the receipt and export of finished products.

Connecting the SPM to the Hawaii refinery are three undersea pipelines:

a 30-inch line for crude oil, a 20-inch line, and a 16-inch line, both for the import or export of refined products.

Connecting the SPM to the Hawaii refinery are three undersea pipelines, two for the import or export of refined products and one for crude oil.

We also have an on-shore pipeline manifold which allows for crude oil to be transferred between the Hawaii refinery and the IES Downstream, LLC (“IES”) storage facility located approximately 2 miles away.

The manifold also allows for transfer of crude oil between the SPM and the IES facility.

From the Hawaii refinery’s gates, we distribute refined products through our logistics network throughout the islands of Oahu, Maui, Hawaii, Molokai, and Kauai and for export to the U.S.

From the Hawaii refinery, we distribute refined products through our logistics network of pipelines, trucks, leased barges, terminals, and storage facilities throughout the islands of Oahu, Maui, Hawaii, Molokai, and Kauai and for export to the U.S.

West Coast and Asia.

The Oahu logistics network includes a 27-mile wholly owned and operated pipeline network that transports refined products from our Hawaii refinery to delivery locations.

A significant portion of our Oahu refined product volumes are distributed through a multi-product pipeline (the “Honolulu Products Pipeline”) to (i) our leased and operated Sand Island terminal, (ii) the Honolulu International Airport, (iii) interconnections to Navy and Air Force fuel facilities, and (iv) two third-party terminals in Honolulu Harbor.

In addition to the Honolulu Products Pipeline, we own four proprietary pipelines connecting our Hawaii refinery to Kalaeloa Barbers Point Harbor, approximately three miles from the Hawaii refinery.

The four pipelines deliver refined products to barges for distribution to the neighboring islands or export, the local utility pipeline and storage network, and another third-party terminal on the west side of Oahu.

The Oahu pipeline network is generally configured to be bidirectional, allowing for both delivery and receipt of products.

We also operate a proprietary trucking business on Oahu to distribute gasoline and road diesel to our customers.

We have a long-term agreement with IES for storage and throughput at the Hawaii refinery which provides for the right to utilize 2 MMbbls of dedicated crude oil and refined product storage, as well as certain IES logistics assets, including its off-shore mooring and Honolulu pipeline system.

Our terminal facilities on Oahu include our Sand Island facility that comprises two tanks with a total capacity of 30 Mbbls, as well as contractual rights to utilize strategically located third-party facilities both near the Hawaii refinery and at Honolulu Harbor.

Our logistics network for the islands neighboring Oahu consists of leased barge equipment, refined product tankage, and proprietary trucking operations on the islands of Maui, Hawaii, Molokai, and Kauai.

We charter a barge and have service agreements with third parties to serve our neighbor island markets.

The barges deliver to, and product is dispensed from, a neighbor island network of seven petroleum terminals with total storage capacity of 301 Mbbls.

In addition to the movements within Hawaii, we also lease Jones Act marine vessels to allow for the movement of petroleum, refined products, and ethanol between the U.S.

West Coast and Hawaii.

Montana Logistics

On June 1, 2023, we purchased distribution and logistics assets in the upper Rockies region, including the wholly owned Silvertip Pipeline, a 40% interest in the Yellowstone refined products pipeline, and four wholly owned and three joint venture refined product terminals located in Montana and Washington.

Our Montana logistics network services the PADD IV and V regions.

Washington Logistics

Our Washington logistics network includes 2.8 MMbbls of storage capacity, a proprietary 14-mile jet fuel pipeline that serves Joint Base Lewis McChord, a marine terminal with 15 acres of waterfront property, a unit train-capable rail loading terminal with 107 unloading spots, a manifest rail siding with 32 spots including asphalt, butane, and biodiesel loading and unloading facilities, and a truck rack with six truck lanes and ten loading arms.

Our Washington logistics network includes storage capacity, a proprietary jet fuel pipeline that serves Joint Base Lewis McChord, a marine terminal with waterfront property, a unit train-capable rail loading terminal, a manifest rail siding, including asphalt, butane, biodiesel loading and unloading facilities, and a truck rack.

These assets provide connectivity to Bakken, Canadian, and Alaskan crude oil, renewable fuels, and the Pacific, West Coast, Pacific Northwest, and Rockies product markets.

Wyoming Logistics

Our Wyoming logistics network includes 190 Mbbls of crude storage tank capacity and a 50-mile crude oil pipeline that provides us access to crude oil from the Powder River Basin.

This network also includes a 40-mile refined products pipeline that transports product from our Wyoming refinery to a common carrier with access to Rapid City, South Dakota.

The logistics network in Wyoming includes storage, loading racks, and a rail siding at the refinery site.

Our crude oil and refined product tanks at the Wyoming refinery have a total capacity of 593 Mbbls.

Our Wyoming logistics network includes crude storage tanks and a crude oil pipeline that provides us access to crude oil from the Powder River Basin.

This network also includes a refined products pipeline that transports product from our Wyoming refinery to a common carrier with access to Rapid City, South Dakota.

The logistics network in Wyoming includes crude oil and refined product storage capacity, loading racks, and a rail siding at the refinery site.

We also own and operate a jet fuel storage facility and pipeline that serve Ellsworth Air Force Base in South Dakota.

Hawaii Market

The tourism industry continued to rebound in 2022 with visitor counts at 90% of 2019 levels at the end of the year.

Despite having slightly fewer visitors, visitor spend was nearly 14% higher near the end of 2022 compared to the same time period in 2019.

Domestic arrivals continue to outpace international visitors with domestic travel higher than pre-pandemic levels as international tourism has yet to fully recover.

According to the State Department of Business, Economic Development and Tourism (“DBEDT”), labor market conditions improved in 2022 with unemployment at 4.0% in 2022.

Many workers who left the labor force during the pandemic have returned.

The Honolulu consumer inflation rate declined in 2022 from 7.5% in March to 6.6% in September.

In an effort to curb inflation, the Federal Reserve Bank implemented a series of interest rate hikes which negatively impacted home sales and construction activity also slowed as a result.

The DBEDT economic growth projection for Hawaii in 2023 is 1.7%.

Pacific Northwest and Rockies Markets

Hawaii’s visitor industry is the primary driver of the state’s economy.

In August 2023, the Maui wildfires dominated news headlines and the tragic event had a significant impact in Maui County.

According to data from Hawaii’s State Department of Business, Economic Development and Tourism (“DBEDT”), between August and October 2023, visitor arrivals by air to Maui County decreased 51.4 percent compared to the same period in 2022.

The University of Hawaii Economic Organization (“UHERO”), however, noted that the Maui visitor industry is recovering faster than anticipated and visitors to the rest of the state have reached record levels.

Per DBEDT, 9.6 million visitors arrived in Hawaii in 2023, a 4% increase from 9.2 million in 2022.

Total arrivals declined 7% when compared to 10.4 million visitors in pre-pandemic 2019.

Most of these visitors were domestic travelers;

the Japanese market recovery is slower due to the relative weakness of the yen to the U.S.

This leaves Hawaii’s dependence on the U.S.

market unusually high.

The total number of visitors to Hawaii is expected to be essentially flat in 2024 with an expected return to moderate growth in 2025.

In 2023, overall total visitor spending rose to $20.8 billion, compared to $19.7 billion in 2022 and $17.7 billion in 2019.

Overall, UHERO expects Hawaii’s job growth to be about 1% in 2024.

According to DBEDT, the state unemployment rate is expected to be 3.0% in 2023, and will improve to 2.8% in 2024, 2.6% in 2025, and 2.4% in 2026.

As measured by the Honolulu Consumer Price Index for Urban Consumers, inflation is expected to be 2.8% in 2023, lower than the projected U.S.

consumer inflation rate of 4.1% for 2023.

Hawaii consumer inflation is expected to decrease to 2.2% by 2026.

Mainland Markets

Spokane, Washington, and Northwest Idaho are the primary regions of our Pacific Northwest retail operations and are enjoying significantly higher population growth rates than the country as a whole.

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Spokane is a regional hub in eastern Washington, with a population of over a half million and a variety of employers in health care, retail, and other industries.

According to the Spokane City Department of Economic Development, the unemployment rate was 4.1% through October 2022, and the average annual wage was $57 thousand in 2021 in positions covered by unemployment insurance.

According to the Spokane City Department of Economic Development, the unemployment rate was 3.4% through September 2023, and the average annual wage was $62 thousand in the first quarter of 2023 in positions covered by unemployment insurance.

A significant portion of the products produced by our Washington refinery stay within the Puget Sound region.

Washington is one of the fastest growing states in the union and most of this growth is occurring in the Puget Sound area due to large technology and information industry companies.

Washington is one of the fastest growing states in the nation, and most of this growth is occurring in the Puget Sound area due to large technology and information industry companies.

According to the U.S.

Bureau of Economic Analysis (the “BEA”), gross domestic product (“GDP”) for the State of Washington grew by 6.7% from 2020 to 2021.

Bureau of Economic Analysis (the “BEA”), gross domestic product (“GDP”) for the State of Washington grew by 5.4% from 2022 to 2023 based on seasonally adjusted preliminary third quarter 2023 data.

The primary market for our Wyoming refined products is the Black Hills Region in South Dakota, driven largely by Pennington, Lawrence, and Meade counties, which represents nearly half of the state’s taxable tourism sales.

According to the U.S.

Census Bureau, the population in Pennington County, the state’s second largest county, increased by 8.2% from 2010 to

2020 compared to 7.4% nationally over the same period.

Additionally, the South Dakota economy expects to get a boost from additional development at Ellsworth Air Force Base as the main operating base for the B-21 Raider and the home for the training unit and an operational squadron.

Census Bureau, the population in Pennington County, the state’s second largest county, increased by 8.2% from 2010 to 2020 compared to 7.4% nationally over the same period.

Demand for gasoline is highly seasonal, with a large increase in demand during the summer driving season.

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According to the South Dakota Department of Tourism, visitor spending has increased in 2023, above pre-pandemic levels.

South Dakota welcomed 14.4 million visitors for the year, resulting in visitor spending of approximately $4.7 billion in 2022, an increase of 15% over the pre-pandemic spending heights reached in 2019.

Additionally, $1.0 billion, or 21% of tourism dollars, were spent on transportation services, representing an increase of 10% over pre-pandemic transportation spending.

We also distribute refined products to customers in central and northeastern Wyoming.

The economy in Wyoming is sensitive to demand for Powder River Basin coal and other locally-produced commodities.

Coal production increased 4.2% in 2022 and the U.S.

Energy Information Administration forecasts that coal production will decrease in 2023.

South Dakota welcomed 14.7 million visitors for the year, resulting in visitor spending of approximately $5.0 billion in 2023, an increase of 4.9% compared to 2022 and 22% over the pre-pandemic spending heights reached in 2019.

Additionally, $1.1 billion, or 22%, of tourism dollars were spent on transportation services, representing an increase of nearly 17% over pre-pandemic transportation spending.

A significant portion of the products produced by our Montana refinery serve a robust economy that includes the states of Montana, Wyoming, Colorado, Idaho, Utah, eastern Washington, and the Dakotas.

The business is operated as an integrated fuels value chain, deriving value along the entire chain from the sourcing of crude oil to refining, distributing, and marketing of fuels to our customers.

The Montana refinery complements the markets served by our Washington and Wyoming refineries by benefiting from the growth of the Pacific Northwest and strong seasonal demand in the Rockies and surrounding areas.

In addition to supplying the Rocky Mountain and Pacific Northwest markets with transportation fuels, our Montana refinery also supplies asphalt to customers throughout the United States, giving the refinery a strategic advantage in its ability to process heavy, sour crude oils.

Our crude processing flexibility allows us to maintain a diverse product offering, including jet fuel, gasoline, diesel and asphalt, through a robust network of both proprietary and third-party terminals.

This, along with the ability to deliver product via various transportation modes (e.g.

pipeline, truck, rail), enables convenient supply options for our customers.

OTHER OPERATIONS

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As of December 31, 2023, we owned a 46% equity investment in Laramie Energy, an entity focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado.

We have discontinued the application of the equity method of accounting for our investment in Laramie Energy because the book value of such investment has been reduced to zero.

Our investment in Laramie Energy is not material to our consolidated financial statements as of December 31, 2022.

BANKRUPTCY AND PLAN OF REORGANIZATION

Background and General Recovery Trust

In 2011 and 2012, our predecessor, Delta Petroleum Corporation (“Delta”) and its subsidiaries (collectively “Debtors”) filed voluntary petitions under Chapter 11 of the U.S.

Bankruptcy Code in the U.S.

Bankruptcy Court for the District of Delaware (“Bankruptcy Court”).

In March 2012, the Debtors obtained approval from the Bankruptcy Court to proceed with Laramie Energy II, LLC as the sponsor of a plan of reorganization (“Plan”).

Delta emerged from bankruptcy, amended and restated its certificate of incorporation and bylaws, changed its name to Par Petroleum Corporation, and contributed the majority of its natural gas and oil properties to Laramie Energy on August 31, 2012 (the “Emergence Date”).

The reorganization converted approximately $265 million of unsecured debt to equity and allowed us to preserve significant tax attributes.

On the Emergence Date, the Delta Petroleum General Recovery Trust (“General Trust”) was formed to conclude the bankruptcy.

Shares Reserved for Unsecured Claims

The Plan provides that certain allowed general unsecured claims be paid with shares of our common stock.

Pursuant to the Plan, allowed claims are settled at a ratio of 54.4 shares per $1,000 of claim.

As of December 31, 2022, two related claims totaling approximately $22.4 million remained to be resolved by the Trustee for the General Trust.

One of the two remaining claims was filed by the U.S.

Government for approximately $22.4 million relating to ongoing litigation concerning a plugging and abandonment obligation in Pacific Outer Continental Shelf Lease OCS-P 0320, comprising part of the Sword Unit in the Santa Barbara Channel, California.

The second unliquidated claim, which is related to the same plugging and abandonment obligation, was filed by Noble Energy Inc., the operator and majority interest owner of the Sword Unit.

We believe the probability of issuing shares to satisfy the full claim amount is remote, as the obligations upon which such proof of claim is asserted are joint and several among all working interest owners and Delta, our predecessor, owned an approximate 3.4% aggregate working interest in the unit.

The settlement of claims is subject to ongoing litigation and we are unable to predict with certainty how many shares will be required to satisfy all claims.

We have accrued approximately $0.5 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at December 31, 2022.

Closing of the Bankruptcy Cases

On February 27, 2018, the Bankruptcy Court entered its final decree closing the Chapter 11 bankruptcy cases of Delta and the other Debtors, discharging the Recovery Trustee, and finding that all assets of the General Trust were resolved, abandoned, or liquidated and have been distributed in accordance with the requirements of the Plan.

In addition, the final decree required the Company or the General Trust, as applicable, to maintain the current reserves owed on account of the remaining claims of the U.S.

Government and Noble Energy, Inc.

As of June 30, 2020, we discontinued the application of the equity method of accounting for our investment in Laramie Energy because the book value of such investment had been reduced to zero.

Effective February 21, 2023, we resumed the application of the equity method of accounting with respect to our investment in Laramie Energy.

The balance of our investment in Laramie Energy was $14.3 million as of December 31, 2023.

Please read Note 4—Investment in Laramie Energy to our consolidated financial statements under Item 8 of this Form 10-K for further information.

Other Investments

As noted in the Refining and Logistics discussions above, as of December 31, 2023 through the Billings Acquisition, we own a 65% and a 40% equity investment in YELP and YPLC, respectively.

Please read Note 3—Refining and Logistics Equity Investments to our consolidated financial statements under Item 8 of this Form 10-K for further information.

ENVIRONMENTAL REGULATIONS

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Climate Change and Regulation of Greenhouse Gases

According to many scientific studies, emissions of CO 2 , methane, NO X , and other gases commonly known as greenhouse gases (“GHGs”) may be contributing to global warming of the earth’s atmosphere and to global climate change.

According to many scientific studies, emissions of CO 2 , methane, NO X , and other gases commonly known as greenhouse gases (“GHGs”) are contributing to global warming of the earth’s atmosphere and to global climate change.

In response to the scientific studies, legislative and regulatory initiatives have been underway to limit GHG emissions.

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In June of 2014, the Hawaii Department of Health (“DOH”) adopted regulations that require each major facility to reduce CO 2 emissions by 16% by 2020 relative to a calendar year 2010 baseline (the first year in which GHG emissions were reported to the EPA under 40 CFR Part 98).

The GHG rules include an alternative for facilities to demonstrate that further GHG reductions are not economically viable and an additional provision that authorized the DOH to issue a waiver if GHGs are being effectively controlled as a consequence of other state initiatives and regulations such as the Renewable

Portfolio Standard.

The Hawaii GHG regulation allows for “partnering” with other facilities that have or are expected to make more significant CO 2 /GHG reductions.

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The DOH issued a GHG permit, which caps GHG emissions from both refineries at 904,945 metric tons per year which (as required by regulation) is 16% below the combined facility GHG emission levels of 2010.

In 2021, after essentially all processing and fuel use at the Par West refinery had been suspended, the combined GHG emissions for both refineries in Hawaii totaled 604,673 metric tons (which is 33% below the Title V permit limit).

Consequently, no additional operating constraints nor capital for modifications will be required to comply with the State’s current GHG regulation.

The State of Washington and its political subdivisions passed several climate-focused laws in 2021 that are relevant to our Tacoma, Washington location.

These include a low-carbon fuel standard (“LCFS”) designed to reduce the carbon intensity of transportation fuels by twenty percent by 2038 and a “cap and trade”-style program for GHG emissions covering industrial facilities starting in 2023.

The Washington Department of Ecology (“WDOE”) has issued final rules implementing the LCFS effective on January 1, 2023, implementing requirements that are now in effect and will gradually reduce the carbon intensity of fuels sold in the state over time by annually lowering that limit.

Since ceasing refining operations at the Par West facility in 2020, our annual emissions are well below the GHG emissions cap.

The State of Washington and its political subdivisions passed several climate-focused laws in 2021 that are relevant to our operations within the state.

The Washington Department of Ecology (“WDOE”) issued final rules implementing the LCFS effective on January 1, 2023, implementing requirements that are now in effect and will gradually reduce the carbon intensity of fuels sold in the state over time by annually lowering that limit.

The WDOE has also issued final rules with respect to the “cap and trade”-style program with an effective date of November 1, 2022, with credit allocations and auctions commencing during 2023.

While these programs are not expected to result in a material impact to earnings in the immediate term, both programs involve gradual tightening of standards over time and will likely require us to take additional actions or credit purchases, some of which may eventually be material.

Both programs are likely to reduce transportation fuel demand.

In addition to action by the State, on November 16, 2021, the Tacoma City Council adopted its Tideflats and Industrial Land Use Regulations, which prohibits new petroleum storage and allows for only limited additions of clean fuel infrastructure.

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In October 2021, the EPA announced its intent to revisit the December 2020 decision retaining the 2015 NAAQS standard, opening the door to potential additional tightening of those standards and additional requirements for states around the country to adopt more stringent controls, but no action has been taken in that respect to date.

We do not currently anticipate that a more stringent NAAQS will materially impact our Hawaii, Washington, or Wyoming operations, but the risk of impact will increase in Washington if and when the standard is lowered.

On February 7, 2024, EPA lowered the fine particulate NAAQS standards.

We do not currently anticipate that the NAAQS standards will materially impact our operations, but the new standards could materially impact future projects, particularly at our refineries in Montana and Washington.

Fuel Standards

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In August 2012, the EPA and National Highway Traffic Safety Administration (“NHTSA”) jointly adopted regulations that establish vehicle carbon dioxide emissions standards and an average industry fuel economy of 54.5 miles per gallon by model year 2025.

On August 8, 2018, the EPA and NHTSA jointly proposed to revise existing fuel economy standards for model years 2021-2025 and to set standards for 2026 for the first time.

On March 31, 2020, the agencies released updated fuel economy and vehicle emissions standards, which provide for an increase in stringency by 1.5% each year through model year 2026, as compared with the standards issued in 2012 that required

5% annual increases.

On March 31, 2022, the EPA and NHTSA published a final rule containing additional fuel efficiency standards for cars and light trucks that include 8-10% reductions of GHG emissions annually through model year 2026.

On July 28, 2023, NHTSA issued a notice of proposed rule making for cars and light trucks for model years 2027-2032.

By model year 2032, the revised standards would require an industry-wide fleet average of 58 miles per gallon for passenger cars and light-duty trucks.

Higher fuel economy standards have the potential to reduce demand for our refined transportation fuel products.

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We, and other refiners subject to the RFS, may meet the RFS requirements by blending the necessary volumes of renewable fuels produced by us or purchased from third parties.

To the extent that refiners will not or cannot blend renewable fuels into the products they produce in the quantities required to satisfy their obligations under the RFS program, those refiners must purchase renewable credits, referred to as Renewable Identification Numbers (“RINs”), to maintain compliance.

To the extent that refiners will not or cannot blend renewable fuels into the products they produce

in the quantities required to satisfy their obligations under the RFS program, those refiners must purchase renewable credits, referred to as Renewable Identification Numbers (“RINs”), to maintain compliance.

To the extent that we exceed the minimum volumetric requirements for blending of renewable fuels, we can retain these RINs for current or future RFS compliance or sell those on the open market.

As of December 31, 2022, our estimate of the renewable volume obligation (“RVO”) liability for the 2021 and 2022 compliance years is based on the RFS volumetric requirements which the EPA finalized on June 3, 2022.

Those EPA final rules adopted revised deadlines for compliance with RFS standards for prior compliance years, along with new guidelines for compliance in the future.

Additionally, the RFS enables the EPA to exempt certain small refineries from the renewable fuels blending requirements in the event such requirements would cause disproportionate economic hardship to that refinery.

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Court of Appeals for the District of Columbia Circuit vacated the EPA’s approval of year-round E15 sales.

However, on April 29, 2022, in response to supply challenges caused in part by Russia’s invasion of Ukraine, the EPA issued an emergency waiver to permit E15 sales through the summer of 2022.

However, in response to supply challenges caused in part by Russia’s invasion of Ukraine, the EPA has issued certain emergency waivers to permit additional E15 sales.

There are numerous issues, including state and federal regulatory issues, that need to be addressed before E15 can be marketed on a large scale for use in traditional gasoline engines;

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In March 2014, the EPA published a final Tier 3 gasoline standard that requires, among other things, that gasoline contain no more than 10 parts per million (“ppm”) sulfur on an annual average basis and no more than 80 ppm sulfur on a per-gallon basis.

The standard also lowers the allowable benzene, aromatics, and olefins content of gasoline.

The effective date for the new standard was January 1, 2017, however, approved small volume refineries had until January 1, 2020 to meet the standard.

The Hawaii refinery was required to comply with Tier 3 gasoline standards within 30 months of June 21, 2016, the date it was disqualified from small volume refinery status.

On March 19, 2015, the EPA confirmed the small refinery status of our Wyoming refinery.

The Hawaii refinery, our Wyoming refinery, and our Washington refinery, acquired in January 2019, were all granted extensions of small refinery exemptions by the EPA for 2018, but not thereafter.

The standard also lowered the allowable benzene, aromatics, and olefins content of gasoline.

All our refineries are Tier 3 compliant.

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Several of our businesses generate wastes, including hazardous wastes, that are subject to regulation under the federal Resource Conservation and Recovery Act (“RCRA”) and state statutes.

The EPA has limited the disposal options for certain

hazardous wastes and state regulation of the handling and disposal of refining and natural gas and oil exploration and production wastes and solid wastes is becoming more stringent.

Naturally Occurring Radioactive Materials (“NORM”) are radioactive materials that accumulate on production equipment or area soils during oil and natural gas extraction or processing.

Primary responsibility for NORM regulation has been a state function.

Standards have been developed for worker protection;

treatment, storage, and disposal of NORM waste;

management of waste piles, containers, and tanks;

and limitations upon the release of NORM-contaminated land for unrestricted use.

We believe that our operations are in material compliance with all applicable NORM standards.

The EPA has limited the disposal options for certain hazardous wastes and state regulation of the handling and disposal of certain wastes associated with refining operations is becoming more stringent.

We believe that our operations are in material compliance with all applicable RCRA regulations.

The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), also known as the “Superfund” law, imposes liability, without regard to fault or the legality of the original conduct, on certain persons with respect to the release or threatened release of a “hazardous substance” into the environment.

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While this “petroleum exclusion” lessens the significance of our operations, we may generate wastes that may fall within CERCLA’s definition of a “hazardous substance” in the course of our ordinary refining operations.

Although we and, to our knowledge, our predecessors have used operating and disposal practices that were standard in the industry at the time, “hazardous substances” may have been disposed or released on, under, or from the properties currently or historically owned or leased by us or on, under, or from other locations where these wastes have been taken for disposal.

At this time, we do not believe that we have any liability associated with any Superfund site and we have not been notified of any claim, liability, or damages under CERCLA.

Although we and, to our knowledge, our predecessors have used operating and disposal practices that were

standard in the industry at the time, “hazardous substances” may have been disposed or released on, under, or from the properties currently or historically owned or leased by us or on, under, or from other locations where these wastes have been taken for disposal.

At this time, we do not believe that we have any material liability associated with any Superfund site and we have not been notified of any claim, liability, or damages under CERCLA.

Oil Pollution Act

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However, new operating and other regulatory standards could involve additional costs, and failure to comply with such standards could involve penalties, each of which could be material.

Hawaii Consent Decree

On July 18, 2016, Par Hawaii Refining, LLC (“PHR”) and subsidiaries of Tesoro Corporation (“Tesoro”) entered into a consent decree with the EPA, the U.S.

Department of Justice and other state governmental authorities concerning alleged violations of the federal Clean Air Act related to the ownership and operation of multiple facilities owned or formerly owned by Tesoro and its affiliates ("Consent Decree"), including our refinery in Kapolei, Hawaii, that we acquired from Tesoro in 2013.

On September 29, 2023, we received a letter from EPA related to the alleged violation of certain air emissions limits, controls, monitoring, and repair requirements under the Consent Decree.

We are unable to predict the cost to resolve these alleged violations, but resolution will likely involve financial penalties or impose capital expenditure requirements that could be material.

For more information, please read Note 18—Commitments and Contingencies to our consolidated financial statements under Item 8 of this Form 10-K.

Coastal Coordination

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Other Government Regulation

Impact of Dodd-Frank Act Derivatives Regulation

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which was passed by the U.S.

Congress and signed into law in July 2010, contains significant derivatives regulation, including requirements that certain transactions be cleared on exchanges and that collateral (commonly referred to as “margin”) be posted for such transactions.

The Dodd-Frank Act provides for a potential exception from these clearing and collateral requirements for commercial end users and it includes a number of defined terms used in determining how this exception applies to particular derivative transactions and the parties to those transactions.

As required by the Dodd-Frank Act, the Commodities Futures and Trading Commission (“CFTC”) has promulgated numerous rules to define these terms.

The CFTC has re-proposed new rules that would place limits on certain core futures and equivalent swap contracts for or linked to certain physical commodities, subject to exceptions for certain bona fide hedging transactions.

It is possible that the CFTC, in conjunction with prudential regulators, may mandate that financial counterparties entering into swap transactions with end users must do so with credit support agreements in place, which could result in negotiated credit thresholds above which an end user must post collateral.

If this should occur, we intend to manage our credit relationships to minimize collateral requirements.

The CFTC’s final rules may also have an impact on our counterparties.

For example, our bank counterparties may be required to post collateral and assume compliance burdens resulting in additional costs.

We expect that much of the increased costs could be passed on to us, thereby decreasing the relative effectiveness of our hedges and our profitability.

To the extent we incur increased costs or are required to post collateral, there could be a corresponding decrease in amounts available for our capital investment program.

We are subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable state statutes.

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By investing in our employees, we are able to achieve success and continue to execute on our mission and vision.

At December 31, 2022, our workforce consisted of 1,397 employees, including 226 employees, or 16% of our total workforce, at our Hawaii and Washington refineries represented by the United Steelworkers Union (“USW”) with collective bargaining agreements effective through January 31, 2026.

We value all our employees, represented and non-represented, and constantly strive to maintain and improve satisfactory relationships with them.

At December 31, 2023, our workforce consisted of 1,814 employees, including 331 employees, or 18% of our total workforce, at our Hawaii, Washington, and Montana refineries represented by the United Steelworkers Union (“USW”) with collective bargaining agreements effective through January 31, 2026.

We also employ three employees in Montana in our Rocky Mountain Pipeline & Terminals business that are represented by the Rocky Mountain Union (“RMU”) with an agreement effective through October 1, 2025.

We value our employees and constantly strive to maintain and improve satisfactory relationships with them.

Our 1,814 employees work in the following operating segments throughout the United States:

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In addition, management’s assumptions about future events may prove to be inaccurate.

All readers are cautioned that the forward-looking statements contained in this Annual Report on Form 10-K are not guarantees of future performance and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur.

All readers are cautioned that the forward-

looking statements contained in this Annual Report on Form 10-K are not guarantees of future performance and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur.

Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described in “Item 1A.

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— Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Annual Report on Form 10-K.

Additionally, significant uncertainties remain with respect to COVID-19 and its economic effects.

Due to the unpredictable and unprecedented nature of the COVID-19 pandemic, we cannot identify all potential risks to, and impacts on, our business, including the ultimate adverse economic impact to the Company’s business, results of operations, financial condition, and liquidity.

All forward-looking statements speak only as of the date they are made.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business